US midterm election results have been finalized, with the Democratic Party successfully taking control of both the Senate and the House of Representatives, a dramatic shift in the political landscape that quickly transmitted to the digital asset market, triggering sharp volatility and a rebound.

Bitcoin (BTC) briefly fell to around $75,618 during intraday trading, then staged a strong recovery driven by multiple factors, reclaiming the $80,000 mark. Although the market widely attributed this rebound to sentiment recovery from the removal of political uncertainty, deeper capital flows reveal a more complex game: the core driver of the price recovery was not a surge in physical buying demand, but the concentrated unwinding of large short positions in the derivatives market. This type of price increase driven by short covering is often accompanied by a brief depletion of liquidity and insufficient follow-through momentum, leaving the market highly cautious and divided even amid the celebration.

From a macro market perspective, the shift in political direction did inject a shot of adrenaline into the market, but actual capital behavior showed a clear divergence. On the 4th (local time), the total global digital asset market capitalization climbed to $2.69 trillion, up 3.11% from the previous day; trading volume during the same period surged to $90.9 billion, an increase of 44.37%, with Bitcoin accounting for 60.1% of that trading. However, data compiled by Woofun AI shows that on the derivatives side, total liquidations over the past 24 hours reached $936.1 million, with short position liquidations accounting for $533.28 million of that total. Bitcoin.com, citing CoinGlass data, further noted that Bitcoin alone accounted for approximately $370 million in short liquidations. Meanwhile, the total value of outstanding open interest fell 4.36% to $347.73 billion. The contrast in these figures is highly telling: the sharp expansion in trading volume was not accompanied by a rise in open interest, but instead saw a significant contraction, clearly indicating that the current price rebound stems mainly from the clearing of existing positions and short stop-losses, rather than a substantial influx of new capital. Without sustained support from fresh buying, this short-covering-driven rally is unlikely to be sustainable over the long term.

In terms of individual token performance, the market showed broad gains but with intensifying divergence. Bitcoin (BTC) rose 2.99% from the previous day, trading at $81,119.94. Ethereum (ETH) performed even more strongly, gaining 5.61% to trade at $2,416.04. Among other major assets, Binance Coin (BNB) rose 2.42% to $715.50; Ripple (XRP) rose 2.14% to $1.30; SOL rose 1.57% to $94.81; ZEC posted the most notable gain at 6.48%, trading at $1,291.79; Dogecoin (DOGE) rose 2.28% to $0.07680. In contrast, some assets saw pullbacks: Tron (TRX) fell 1.11% to $0.3196; HYPE dropped 2.00% to $83.64. This divergence reflects the selective nature of capital risk appetite, as well as differences in project fundamentals and market sentiment.

Market expert opinions at this moment show a stark polarization, reflecting deep divisions over the outlook. Digital asset analyst Ted Pillows stated on X that Bitcoin has already digested recent negative factors, forming a solid bottom, and predicted a new high could be reached in the third or fourth quarter of next year. Cryptogoos viewed the reconfirmation of the 50-week moving average as a key signal that the market is beginning to recover. CryptoMichNL expects that with post-midterm uncertainty removed, Bitcoin may continue to maintain strong upward momentum through year-end. However, analysts at Bitfinex issued a stern warning, pointing out that physical buying demand is not strong and that inflows into US Bitcoin spot ETFs are also weakening. They analyzed that if the daily closing price falls below the key support level of $75,839, Bitcoin could further decline to the $70,000 to $75,000 range. In the options market, demand for put options is more than double that for call options, further confirming the market's vigilance against downside risk. The CoinMarketCap Fear and Greed Index, which reflects investor sentiment, stands at 42, at a "neutral" level. Going forward, the market will focus on US CPI (Consumer Price Index) data and the Federal Reserve's monetary policy direction, as these macro variables will be key to determining whether the market can break out of its current range-bound pattern.